Almost half of company cars now below 125g/km

Tax policy has shifted behaviour which has let to almost half of company cars now producing less than 125g/km, according to research by a trade publication.

Data from HMRC obtained by Fleet News shows that the tax year 2002/03, more than half of the company car fleet (58 per cent) had carbon dioxide emissions in excess of 165g/km. Ten years later, that had fallen to just 9%.

Fleet News says between 2011/12 and 2012/13 – the tax years for which HMRC statistics have just been made available – the number of company cars emitting less than 145g/km increased by 20% and cars emitting more than 145g/km decreased by 32%.

Drill down further and almost half (43%) of the fleet have CO2 emissions of 124g/km or less, with more than a fifth (21%) emitting between 115-124g/km. Just 2% of company cars (20,000 units) had emissions of less than 95g/km. 

HMRC data also shows that about 81% of company cars use diesel fuel, with 19% using petrol. Looking back to 2002/03, only 33% of company cars used diesel.

However, while the emissions make-up and fuel type of the company car fleet has changed, the data shows the overall number of company cars on UK roads has remained at the same level for the past two years.

The newly-published provisional figures for the 2013/14 tax year reveal that benefit-in-kind (BIK) tax was paid on a total of 940,000 company cars – the same figure for 2012/13.

While that total represents a 10,000-car fall on 2011/12, it suggests numbers have stabilised after a steady decline since the company car peak recorded in 1999/2000 when 1.16 million people paid BIK tax on a car, according to HMRC.